Tools for the job: leadership skills
Internal audit leaders must be able to identify and navigate the nuances of professional relationships, recognise the strengths and weaknesses in an organisation’s systems and culture, as well as within the internal audit team, and position the internal auditors as influential critical friends.
The most effective internal audit leaders tend all to be able to:
• Create and implement a vision that aligns with the organisation’s strategic direction and informs its strategic plans.
• Invest in capabilities that support this vision.
• Source and retain the necessary talent – mentoring, talent development and the ability to recruit the right people are all essential components.
• Empower the internal audit function – they need to create a culture that supports a high-performing working environment.
• Demonstrate executive presence – they communicate bold perspectives and think broadly about the company.
• Partner with the business in meaningful ways – they must develop relationships built on trust, forge partnerships to co-ordinate risk management across functions, and use those connections to develop an integrated assurance strategy across the organisation.
“Leading others is a privilege and being able to inspire a team by demonstrating high quality leadership enables leaders to do their best work and thrive," says Sharon Hardcastle, chief operating officer at PotentialSquared. “Leaders should be self-aware and understand their own behaviour. They should also be agile and able to flex to address different circumstances.”
This may mean that they appear to wear many hats, she adds. “Curiosity, questioning and then listening is important. Leading others sometimes takes courage. Building your relationships through trust and respect enables you to create a platform that allows you to show your vulnerability and be your authentic self.”
Leaders who wish to develop should ask themselves the following questions:
• Is my leadership style working and still relevant to my team?
• What blind-spots or gaps do I have?
• How well am I coaching or facilitating my team to be brilliant?
• How prepared am I and my team for challenging and complex scenarios?
• How well am I communicating and influencing?
The role of an internal audit leader is often isolated, so it can be more challenging for an audit leader to retain confidence and conviction than it is for those in other sectors. A lack of feedback from peers who can observe and collaborate, and the independent nature of the role, can lead to a lack of clarity and uncertainty.
One strategy to mitigate this is to recruit a coach. They can serve as a mirror and can both support and hold an audit leader accountable. They can increase a leader’s self-awareness and help them to understand their impact on others – positive or negative – as well as encouraging them to develop their ability to influence.
It’s also worth considering our attitudes towards failure and learning. People perform at their best and risk coming up with new ideas if there is an atmosphere of psychological safety in the team. The concept of psychological safety was developed by Harvard Business School professor Amy Edmondson and is defined as “a shared belief that the team is safe for interpersonal risk-taking”. Establishing a climate of psychological safety allows space for people to speak up and share their ideas.
“If leaders can provide support and encouragement and predominantly use a coaching style, then the team is likely to grow
and improve,” says Stephen Moreton, head of partnerships at PotentialSquared. “If, however, we are unwilling for mistakes to be made, or treat failures primarily through criticism, we remove the space for our team to experiment or to collaborate and ask questions. This leads to people hiding their mistakes, which can have catastrophic consequences.”
Questions to ask
In coaching:
Think of the most powerful and incisive questions you could ask in a one-to-one meeting or in a
coaching session:
• How would you like to spend this time?
• What would you love to be able to think about?
• What assumptions are you making that are stopping you
from achieving your objectives?
• Do you think that these assumptions are true?
Reflect on your experience of high-performing teams:
• What was the best team environment you have experienced (at work or outside)?
• What do you believe made it so enjoyable and productive?
• What was the worst team environment you have experienced (at work or outside)?
• What do you believe made it so?
What did the leaders think?
Nadia Ahmed, Head of internal audit, Wincanton
“I’m in my first head of internal audit role and I attended the leadership sessions because it can be a lonely position and there isn’t always someone you can turn to and ask questions. I was keen to learn more about how to perform well in this role and, in particular, to explore the leader’s responsibility to provide the right levels of challenge upwards and sideways. I also wanted to connect with other heads of internal audit in other sectors.
One of the most important things I learned was that it doesn’t matter how long you’ve been in the role, many heads of internal audit seem to have the same uncertainties and face the same challenges as I do. It was useful to hear others saying the things I feel.
As a woman from an ethnic minority, I recognise that I may be more prone to experiencing imposter syndrome, but it was good to hear that many people question themselves about ‘am I challenging enough or too much?’. Heads of internal audit are surrounded by people who challenge us, but fewer people support us when we challenge management. I found the sessions increased my confidence, which is exactly what I was looking for.”
Carley Eaton, Group chief auditor, Vanquis Banking Group
I decided to attend because I’d worked with PotentialSquared in a previous role at Barclays and had found this useful for drawing out points that I hadn’t considered. So often we go from meeting to meeting with too little time between to think and explore issues, so I wasn’t looking for a moment of epiphany, but I wanted time to think and to talk to other chief audit executives and to share the challenges of the role.
I found it provided useful reminders about how to speak truth to power and about developing relationships in a way that protects our own integrity and values. For me, the most important session was the one about coaching, because I’ve found that challenging to do in a hybrid working environment. It reminded me that it’s often about asking the simple questions that open up a much wider conversation.
These sessions helped me to move away from the purely transactional approach to looking at how we can add more value as leaders and as a team. It’s important to step away and think about our own needs and those of our teams. We often expect leaders to be able to navigate sensitive conversations with individuals and stakeholders that they may not feel comfortable with, or have experience in – for example, in areas about mental health and wellbeing.
We need to ensure that our messages create the optimal emotional response in auditees so they are most likely to respond well to recommendations. The skills required for managing internal audit teams have changed and we need to recognise this.
Jill Elliott, Head of internal audit, risk and assurance, TFL
My reason for attending was to share experiences and hear from other internal audit leaders. I’ve recently taken on a new team and this was a chance to learn and to hear from peers in other organisations.
It’s reassuring to know that others face the same challenges as I do and I found the sessions supportive – it’s good to have a safe space to talk about all the issues around leadership. It’s not just about developing your own leadership style, but also about dealing with the leadership styles of those around you.
We need to understand and recognise how different people react in various situations. So much of the internal audit role is about finding the right approach to achieve maximum impact and also about managing upwards and sideways as well as downwards.
All of us are going through a period of change after moving to remote working during lockdowns. Now, offices are switching to hybrid working and leaders have to work out how to manage people in different places and with different views on how they want to work. We’re also auditing teams who are working in new ways. I came away from these sessions with good ideas about ways to deal with different people, situations and reactions. I also appreciated the chance to talk to other leaders and learn about their experiences. n
Leadership development consultancy PotentialSquared ran a series of workshops for audit leaders with the Chartered IIA in 2022-23.
This article was published in May 2023.